Newfarm or increase dependence on Chinese pesticide raw materials

On Tuesday, Newfarm said it would gradually close and sell its factory in Melbourne's Laverton over the next 18 months, which mainly produces insecticides and fungicides. In addition, the company will reduce the production of herbicides at its factory in Linz, Austria.

Nufarm said the move was mainly due to the turbulent external market environment and the factory business suffered. Due to the weak product demand and the challenges of logistics and transportation, the company's European business is facing greater pressure. Newfarm promised in March to find all possible cost-saving measures.

Newfarm expects that the implementation of the plan will save 15 million Australian dollars (10.3 million US dollars) annually. In addition, the one-time cash cost of A$25 million from the reorganization will be partially offset by the gains from the sale of assets in Australia in the future.

Nufarm said in April this year that since China is the only supplier of raw materials for the production of some agrochemical products in Australia, Nufarm will try to reduce its dependence on China. But just two months later, Newfarm’s decision may make Australia more dependent on China for agricultural products.